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Live-blogging the Hearing on the Role of the Accounting Profession in Preventing Another Financial Crisis

Okay team, are we ready to do this? The first panel will be informative but fairly uneventful unless one of David Vitter’s hookers shows up unexpectedly and demands that her opinion be heard and the chances of that seem slim. The second panel may have more excitement since we have Anton Valukas and Lynn Turner in one corner and Cynthia Fornelli of the Center for Audit Quality and Thomas Quaadman of the U.S. Chamber of Commerce in other but we’ll see how things go.

We’re using a different method of live-blogging today, trying out Cover it Live for the first time on GC. You’ll be able to follow our coverage (after the jump and watch the hearing live here) and comment in real time. Once you submit your comment, I’ll simply approve it (just so long as you don’t say anything especially idiotic or offensive) and it will appear right alongside my comments. Professor Dave Albrecht is also live-blogging, so jump over to The Summa to check out his thoughts. Also, Adrienne is on the Hill today live-tweeting the proceedings, so be sure to keep tabs on the details she’s providing on nervous staffers, Brooks Brothers suits and male-pattern baldness. All right, let’s get on with it, shall we?

Valukas Testimony: Public Has the Right to Conclude That Auditors Will Stand Up to Management

“The public has every right to conclude that auditors who hold themselves out as independent will stand up to management and notsuccumb to pressure to avoid rocking the boat.”

Valukas Testimony 4-6-11 Am

Lynn Turner Doesn’t Let Accountants, SEC, FASB Off the Hook for Their Part in Financial Crisis

Today’s testimony before the subcommittee of Securities, Insurance and Investment will be focused on the how the accounting industry can help prevent the next financial crisis and will feature many prominent figures. The first panel will feature James Doty, Chairman of the PCAOB, Leslie Seidman, Chairwoman of the FASB and James Kroeker the Chief Accountant of the SEC.

The second panel will include Anton Valukas of Jenner & Block and the bankruptcy examiner of Lehman Brothers, Cynthia Fornelli of the Center for Audit Quality, Thomas Quaadman of the U.S. Chamber of Commerce and Lynn Turner, the former Chief Accountant of the SEC. Throughout the statement Mr Turner points to various defects within the accounting profession infrastructure. This includes the profession itself, “auditors helped contribute to a crisis in confidence” the efforts of the accounting rule-making body, “Clearly the FASB has failed to develop quality and timely standards,” and the hapless SEC, who “[lacks] the tools for the job.”

Mr. Turner’s written statement appears in full after the jump.